Latest / Best of Business / John Cuthbertson: Chartered Accountants Australia New Zealand lead on the number of Kiwis in debt to the IRD

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John Cuthbertson: Chartered Accountants Australia New Zealand lead on the number of Kiwis in debt to the IRD · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk SEDB. Follow
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  Speaker 2: Half a million Kiwis are currently in debt to the IID,
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  Speaker 2: and experts say something here, something needs to change here.
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  Speaker 2: Total tax debt for the country is sitting at nine
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  Speaker 2: point four billion dollars. That is up sharply from twenty
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  Speaker 2: twenty three when it was just six billion dollars or thereabout.
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  Speaker 2: John Cuthbertson is the tax lead for Charted Accountants Australia,
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  Speaker 2: New Zealand and with.
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  Speaker 3: US Hi John, Hi here, how are you?
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  Speaker 2: I'm very well? Thank you? That that sharp increases that
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  Speaker 2: down to COVID is it?
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  Speaker 3: That's really our COVID hangover? Unfortunately everything went soft over
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  Speaker 3: that period and as a consequence, we had a build
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  Speaker 3: up of debt and now we've got something. I get
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  Speaker 3: it back.
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  Speaker 2: Okay, what proportion of that do you think is actually
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  Speaker 2: going to be paid back?
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  Speaker 3: Look as dead ages, it becomes hard to collect and
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  Speaker 3: we know that about forty three percent of it is
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  Speaker 3: over two years old. So once you get into that territory,
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  Speaker 3: get hard and hard to collect, and you've really got
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  Speaker 3: to strategize that look to get the best possible outcomes
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  Speaker 3: from it.
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  Speaker 2: How has the question has been asked about this, How
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  Speaker 2: is it that it got to that level? How should
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  Speaker 2: it have been allowed to get to that level?
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  Speaker 3: I guess the answer is no. But it has built
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  Speaker 3: up over time, unfortunately, and during that period we were
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  Speaker 3: trying to do our best to ensure business survived and
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  Speaker 3: carried on. But as part of that we've ended up
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  Speaker 3: with a number of businesses that have unfortunately wrapped up
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  Speaker 3: quite large debt bills and are probably uneconomic and will
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  Speaker 3: not survive.
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  Speaker 2: I mean, is it ultimately, were we going to end
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  Speaker 2: up in the same place either way? Had the government
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  Speaker 2: you know, once once the problem started post COVID and
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  Speaker 2: the IID relaxed what it was doing to save the businesses,
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  Speaker 2: they were going to fold either way, weren't they?
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  Speaker 3: Well, certainly a number of them were likely to. I mean, yes,
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  Speaker 3: some could have traded through. But I think they're also
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  Speaker 3: trying to protect the employment scenario as well. But I mean,
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  Speaker 3: the unfortunately now is a number of these smaller businesses
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  Speaker 3: have put their life savings into the business as well,
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  Speaker 3: you know, the owner operators, and they're really looking at
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  Speaker 3: having nothing left the ideal scenario is not to let
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  Speaker 3: debt age in the first place, seek early help and
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  Speaker 3: make it more manageable.
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  Speaker 2: I mean, John, I know that this is heartbreaking for
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  Speaker 2: these people, but this has unfortunately been very difficult times.
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  Speaker 1: Right.
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  Speaker 2: There was always there were always going to be casualties.
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  Speaker 3: Correct.
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  Speaker 2: Now there's a question as to whether it is too
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  Speaker 2: easy to start businesses in this country.
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  Speaker 3: What do you say, Well, it certainly is easy. You
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  Speaker 3: don't need any skills, and I mean I think in
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  Speaker 3: a number of cases you've got some very good, talented
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  Speaker 3: people who have great ideas but are not business people,
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  Speaker 3: so I mean unless they get the right wrap around support.
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  Speaker 3: You can see from the stats that a number of
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  Speaker 3: businesses fail in their first couple of years. It probably
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  Speaker 3: suggests something we're an entrepreneurial bunch.
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  Speaker 2: Yeah all right, John, thanks very much, appreciate it. John Cuthbertson,
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  Speaker 2: Chartered Accountants, Australia, New Zealand Tax Lead, I have got
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  Speaker 2: some good news for you and I am so stoked
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  Speaker 2: to be able to say this. The turnaround at the
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  Speaker 2: warehouse is working. The mcquarie analysts have upgraded there where
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  Speaker 2: their rating of the warehouse. They now have it at Outperform.
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  Speaker 2: They say the recovery is underway. The turnarounds happened, the
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  Speaker 2: recovery is underway. The forecast earnings per forecast earnings per
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  Speaker 2: share is seven point four cent for the twenty twenty
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  Speaker 2: seven financial year. They expect the dividend payments to resume.
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  Speaker 2: And it's basically comes down to the new ce of
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  Speaker 2: the Warehouse Board poached out of South Africa, Mark Sterton,
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  Speaker 2: who came over here. I had a look at the
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  Speaker 2: thing and went, this is not going to work. If
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  Speaker 2: this is the kind of retailer, way too much cost
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  Speaker 2: going on at headquarters. Let's chop it. Went hard on
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  Speaker 2: it and as a result appears at this stage to
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  Speaker 2: be saving the thing. The share price is up as
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  Speaker 2: a result of that. I'm thrilled because there is a
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  Speaker 2: part of me that I mean, because we grew up
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  Speaker 2: with the warehouse, right, so we all want the warehouse
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  Speaker 2: to It's just nice to know it can survive. It's
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  Speaker 2: up against the kmarts, it's up against the Amazons, it's
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  Speaker 2: up against the shine Sheen Shane whatever. I still don't
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  Speaker 2: know how to bloody pronounce that nonsense and all the
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  Speaker 2: other cheap crap from China, so it's nice to know
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  Speaker 2: that the warehouse might have a bit of a fighting
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  Speaker 2: chance thanks to a sapha that we've imported. So thanks
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  Speaker 2: very much, Mark Sturton and May Long May at Last.
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